Envisioning RWA+ New Narrative in Gaming: Will it Become the Engine of This Bull Run?

Is the bull run here?

If we stand in November 2025 and look back at the grand and turbulent cryptocurrency market over the past two years, we might be surprised to find that October 23, 2023, could be a typical sign of the beginning of this bull run: within 24 hours, BTC surged directly from $30,000 to $34,000. Many friends around me who had heavily invested around $20,000 were overjoyed: "Look, look, I told you the crypto bull run would definitely come!" Meanwhile, some friends who missed out and were still conflicted continued to argue: "The current on-chain data shows no new money entering the market, and the total amount of stablecoins is still at a low point. This is a false bull run amplified by the Bitcoin ETF news, and there will be a wave of correction!"

The bullish perspective of "The Bull is Coming" is very clear, and the three major benefits in the future are enough to support the bull run:

1. Bitcoin ETF accelerates the entry of funds from traditional financial institutions;

2. Bitcoin's halving in May 2024 will raise mining costs to above 28000;

3. The US does not raise interest rates and may even cut them;

Whether it's a real bull or a fake bull, what I've been pondering is: to support a true bull run that lasts at least 12 months, there must be a new narrative for the entire industry to evolve forward. Among the three favorable factors supporting the bull run, the first and third are external forces, while the second is the four-year halving rule that everyone on Earth knew when the BTC white paper was released. So what are the new narratives in the industry that can support this bull run? If one does not develop properly and relies solely on external information and policies, it is highly likely to be a fleeting moment.

Let's take a look at the development trajectory of the last bull run: starting from the summer of DeFi in July 2020, Bitcoin took off from around $10,000. DeFi is a major innovation in the industry, simulating part of the functions of the real-world financial system using smart contracts. It allows for yield-generating collateral, decentralized trading, derivatives, and more. Then, influencers like Musk started to promote it. After that, applications of NFTs and Gamefi 1.0 emerged, enabling many novice users to enter the space without needing to learn the knowledge-intensive DEFI, and they could play and, importantly, also become rich. Finally, the concept of the metaverse became popularized, with Facebook rebranding as Meta. The bull run peaked in November 2021, with the price of Bitcoin reaching $69,000.

The new narrative of this bull run

Did you see it? At least Defi, NFT, Gamefi 1.0, and the metaverse are the four innovations that represent the evolution of the crypto industry during the last bull run. So what are the new evolution points in this bull run, which we often refer to as the new narratives? Let's summarize:

1. SocialFi decentralized social networking, an example is the recently emerged Friend.Tech;

2. Chain Game 2.0, is the chain game of web 2.5: assets are on-chain while the game is centralized, focusing on highly playable games, and then making a fuss about on-chain assets.

3. RWA (Real World Asset), a huge track that can link the massive old money of WEB2 and the crypto industry, and Depin, which has been repeatedly mentioned in the HK crypto circle these past two days, is also one of the RWA tracks.

4. The rise of the Bitcoin ecosystem is notable, after all, whether in WEB2 or WEB3, BTC has been viewed as a value store similar to gold. Why can't we do something with it? Gold can be used to create various derivatives in the financial industry.

Today, let's focus on the third point RWA, because I have always felt that RWA is an extension narrative of the last bull run engine Defi. Think about it, DEFI generates a bunch of virtual coins with code, then plays with smart contracts, simulating the real financial system. It's like children playing house, with a dad, a mom, pots and pans, and rice, oil, and salt. BUT, what impact does this have on the real world? None! Currently, among virtual coins, apart from BTC which has a certain consensus in the WEB2 world, other coins seem like air to outsiders. So what does it mean to have a bunch of extremely complex operations based on air?

So, does that mean Defi is meaningless? Not at all! It can only be said that the DEFI that started during the previous bull run is just the first half of this new narrative. It laid the groundwork for participation, the rules, and the direction, just like if you were to host a full Manchu-Han banquet, DEFI has prepared the kitchen, cooking utensils, and chefs for you. Now we are just waiting for the ingredients to arrive so we can officially start cooking. Therefore, I understand RWA as the second half of DEFI, just like the two parts of "A Chinese Odyssey", "The Moonlight Box" and "The Monkey King Takes a Bride"; they must be viewed together to be truly beautiful.

3. How to Play with RWA

What is RWA? It stands for Real World Asset, and the full translation is "tokenization of real-world assets". Corresponding to real-world assets, RWAs can also be classified into tangible assets and intangible assets based on the type of underlying assets. Tangible assets mainly include real estate, bulk commodities, and artworks; intangible assets include bonds, stocks, and carbon credit points. Since RWAs are based on real-world assets, a legal-supported off-chain operation process is required for asset confirmation and value recognition, followed by tokenization through DeFi protocols and circulation in the on-chain market, while using oracles to monitor the value changes of off-chain assets.

RWA actually already has some practical application cases. The stablecoins we often use, such as USDT and USDC, are RWA. For instance, in physical asset "Satoshi Island" and the hottest RWA this year, US Treasury bonds, these are all cases of on-chain token issuance supported by physical assets. In fact, the idea of a Bitcoin ETF is a reverse financial RWA, where WEB2 funds participate in Bitcoin investment through a compliant ETF financial product; while RWA US Treasury bonds allow WEB3 funds to participate in US Treasury investment without the need for cash out, earning about 5% return per year.

The fervent wave of STO in 2018 was an early attempt at RWA, during which a batch of projects emerged aiming to make traditional assets compliant and on-chain. There also surfaced a number of Web3 entrepreneurial projects targeting this goal, such as tZERO, Polymath, Aspen, and so on. Some case attempts were made, like Aspen REIT, Resolute.Fund, and Fundament Group. However, due to various reasons such as market environment, economic cycles, and regulations, the STO market did not develop as smoothly as anticipated.

The current mainstream approach to RWA is relatively simple, which is to tokenize (Tokenization) in a way similar to securitization, allowing funds from the crypto space (such as various stablecoins) to own real-world physical assets or financial assets' ownership or income rights. This is a simple one-to-one correspondence, and ownership is also restricted by real-world laws. If we want to diversify the approaches to RWA and encourage more users to participate, we need to design better application scenarios for RWA. We believe that this aspect will shine in the current bull run and can be defined as the basic application infrastructure for RWA.

Imagine if, in a game scenario similar to "Monopoly" or "The Sims", you enter a stock exchange, link your wallet, and can actually use the game tokens or U in your wallet to purchase Tesla stocks, enjoying the benefits that Musk provides to you. Or when we virtual travel to a city through gamified scenarios, we could conveniently buy shares of REITs in the city's landmarks, becoming one of the investors in physical assets. Isn't that amazing? Of course, we're only considering the user product experience here; regarding legal regulations and how to connect with the real securities sector, that would require a project party with great finesse.

In fact, the RWA foundational application settings described above can be considered a part of the metaverse in a broad sense, but it is more hardcore in terms of security and connectivity to WEB2, so it needs to be extracted and formed into a new narrative. Currently, it seems that RWA in gaming scenarios should attract more users to join. Not only can it connect the tokens in WEB3 players' wallets to the real world, but it can also allow WEB2 players to experience the unique aspects of WEB3 products: no need to complete so many document signings in the real world, just wallet connection; the holdings are always reflected on-chain, and can be traded at any time.

So the question arises, how can we allow Web2 players to transition more smoothly into Web3 and recognize the new gameplay of RWA+ games? We can put ourselves in their shoes and think about what difficulties a Web2 user from the real world might face when trying to enter the virtual world that is the RWA+ Web3 or even the early stages of the metaverse, and what demands they might have internally?

First, they will be overwhelmed by the previously unfamiliar Web3 information, such as public chains, wallets, DeFi, and other basic knowledge. It seems simple and clear, but it is deep and bottomless, and learning about it is a tangled mess, leaving them unsure of where to start. Then, they will be attracted by various innovative projects and models in Web3, witnessing numerous myths of getting rich quickly, always eager to jump in, yet fearing they might end up as '韭菜' with nothing left, thus seeking advice from various people, hoping to learn the true secrets of Web3 investment or find reliable investment suggestions. Furthermore, they hope to find a truly enjoyable gaming experience in the virtual world of Web3 and wish that the noble identity in the virtual world could extend into the real world, allowing them to participate in some high-end activities with a sense of ceremony, achieving a full integration of online and offline.

The above imagination seems overly optimistic, but it is indeed the most simple and fundamental wish in the hearts of most players transitioning from Web2 to Web3. So, are there any products or games in the market that can fully or partially meet the above needs? We specifically searched the market and found the following cases for everyone's reference.

Four, Case Studies of RWA+ Games

1. DeFi Kingdom

Want to learn about Web3 but find reading articles, studying white papers, and doing desktop research too boring? Is there a product that allows you to learn Web3 knowledge while playing games? There actually is such a project, DeFi Kingdom is one of them.

DeFi Kingdom is a product from the last bull run, a Play2Earn game based on the Harmony blockchain. But it is not just a game; it is also a Dex and an NFT marketplace. The entire game map can be said to visualize and gamify the functions of Dex and NFTs. For example, in the Gardens, players can provide LP through Druid and earn Jewel token rewards. In the Marketplace, users can purchase the main game token Jewel and stake it in the Jeweler bank to earn xJewel tokens, enjoying a series of rights and governance privileges in the project and participating in voting. Players can also use the Trader to exchange Jewel tokens, Harmony tokens, stablecoins, and other mainstream coins.

Another part of the game is based on gameplay involving hero NFTs, including hero blind boxes, completing tasks for rewards, PVP battles, and so on. Users can purchase or rent heroes in the Tavern and breed to produce offspring heroes. Heroes have different attributes such as lineage, profession, rarity, and ability values, while the offspring produced through breeding have their own characteristics.